From its sporting venues and great culture to its robust economy and great job opportunities, Indiana residents have much to love about life in their state. Some hardworking individuals have even managed to pay off their debts and to achieve a level of financial security. Others, however, can only dream about living a life without financial concerns. If you are currently so financially stressed that you are unable to make minimum monthly payments on your debts, you may eagerly be searching for a debt relief solution that will work for you. Some who have stood in your shoes have found the relief they needed through debt settlement. With closer review of what settlement is and who it works well for, you will be able to determine if this is the right strategy for you to pursue.
Why Your Budget May be Tight in Indiana
Indiana is home to many wealth individuals, but the U.S. Census Bureau reports that almost 15 percent of state residents live in poverty. The average Indiana resident may not be financially secure as well. After all, the per capita income in the state is only $25,346, based on U.S. Census Bureau data. This provides very little money each month for residents to cover all of their bills. A large portion of their income is applied to their housing payment. The typical Indiana homeowner pays $1,102 per month for their mortgage payment, and renters pay $745 per month for housing. Other expenses, such as a car loan payment, insurance, food, gas, utilities and more also drain a budget. With so many expenses to pay each month, it is understandable why some people are unable to afford to make high payments on credit card debt. Debt settlement has helped many individuals overcome their financial challenges, and it may be the right move for you to make.
How Debt Settlement Can Help
Many people who have a tight budget are not aware that debt settlement is a possibility. Through debt settlement, your creditors can agree to write off a portion of your debt. This means that your outstanding principal balance will immediately be reduced. Because your outstanding balance is calculated in the minimum monthly payment requirement, you will notice that your minimum amount due each month also declines. You may be able to request a settlement from many of your creditors for a profound effect on your budget. This is because each creditor may agree to write off several hundred dollars or more of debt. The process begins when you or a debt negotiator contact your creditors to request a settlement of debt. Because creditors are not obligated to agree to this, the strategies and skills of a professional debt negotiator are often used to create more successful results.
Who Does Debt Settlement Work For?
Debt settlement is an excellent strategy to consider if you are already falling behind in your payments. However, it can damage your credit rating. After all, you are not paying back the full amount that you borrowed based on the agreed-upon terms when you settle debt. Because it can damage your credit scores, debt consolidation is often considered first by those who have a good credit rating and who have managed to keep up with their debt payments. Debt consolidation will not damage your credit scores like settlement can. Keep in mind that creditors are not obligated to agree to a debt reduction. It can be difficult to predict which creditors will agree to this and how much debt they will write off before you proceed with the process. If debt settlement is not as effective as you need it to be, you may need to seek more profound debt relief though bankruptcy.
What Debts Can Be Settled?
Debt settlement is most commonly used by those who are heavily in debt with high credit card balances. There are many forms of debt that Indiana residents carry, but settlement generally works with unsecured debts that are not backed by the government. While credit card debt works well for settlement, home mortgage loans, car loans and most student loans will not qualify for settlement. If you have a student loan issued by a private bank, this may be included in your settlement plans. You can review your finances carefully to determine which debts may potentially be settled, and your credit counselor can assist with this process as well.
Debt settlement is a serious financial move to make. While it can provide you with the relief you need, it can also damage your credit rating and provides no guaranteed results. If you want more information about settlement or if you want personalized guidance and assistance with the process, speaking with a debt counselor is a great first step to take.